Planning for longer retirement

Australia has one of the highest life expectancies in the world. A 65-year-old man today will live, on average, nearly 20 years longer and a woman the same age can look forward to about 22 more years, according to Australian Bureau of Statistics Life Tables data1. Furthermore, since life expectancy is increasing, today’s younger generations are likely looking forward to an even longer retirement.

While this can be good news, it could also mean you need to take those extra years into account when you’re planning your retirement. The challenge is to find a balance between overspending in the years straight after you retire so that you don’t run into financial issues down the line, and having to live more frugally than you need to.

Even though there are lots of variables involved in how much you’ll have in retirement, generally speaking there are some simple steps you can take to prepare for a longer post-working life.

  1. Consider your retirement savings – generally speaking, superannuation contributions, investment options and appropriate insurance will help to build a savings pool less likely to be eroded by your expenses in retirement.

  2. Working longer – planning to work a little longer (either full-time or part-time) means you may not need to start drawing on your retirement savings so soon.

  3. Consider matching expenses to your income – whether you receive an income stream from your super or another investment source, a possible way to minimise your risk of running out of money is to budget based on your actual income. Bear in mind that in early retirement, you may enjoy a more active lifestyle than later in life.

  4. Consider your life stage – ensuring your investment mix is right for today’s needs and your long-term objectives will help you preserve your capital for longer.

  5. Remember your safety net – as your circumstances change over time, you may find yourself eligible for the Age Pension (full or part). As at May 20182 the basic rate of Age Pension is $826.20 per fortnight for a single person and $1,245.60 for couples (basic rate, combined). These payment rates are indexed twice per year. Be aware the Age Pension age is increasing to 67 years of age for those born in 1957 or later, this may be an important consideration for future planning.

Retirement can be a truly rewarding time, and with the right planning, you’ll be able to protect your retirement savings wisely. If you need some help creating strategies that suit your individual circumstances, it may be worth seeking professional advice.  

1 Australian Bureau of Statistics, Released in November 2013. Life Tables – States, Territories and Australia, 2010-2012 were released by the Australian Government Actuary in December 2014. The Life Tables are updated every five years, with the next update due for release in 2019.

2 Department of Human Services – Age Pension Payment Rates May 2018



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Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information.

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